How Is Debt Divided in a California Divorce?
What It Means to Be a “Community Property” State
Since California is a community property state, most assets acquired during
your marriage will be considered community property—and thus, subject
to equitable distribution. This can include anything from shared vehicles
and homes to bank accounts and life insurance policies.
What happens, however, when it comes to debt?
Just as you would be expected to split up the money that you’ve
earned during your marriage, you would also be expected to share in the
responsibility of repaying debt.
Unless you and your spouse have entered into your own agreement about how
your assets and debt will be divided, the court will order that all community
property be divided equally during your
divorce. Even if one spouse is responsible for accruing most of the debt—either
through medical expenses or credit card bills—both spouses will
be liable for repaying it. The only type of debt that will not be subject
to equitable distribution in a divorce is “separate debt.”
Community Debt vs. Separate Debt
When tasked with the responsibility of dividing your debts, the court will
need to consider the character of each debt. This is important because
“separate debts” belong only to the spouse who incurred them,
whereas “community debts” will be divided between both spouses equally.
Community debts include those incurred after the date of marriage, but
before the date of separation. If a debt was incurred during the marriage,
even if only by one spouse, both spouses will share in the responsibility
of repaying it after their divorce.
Separate debts include those that were incurred before the date of marriage
or after the date of separation. If one spouse accrued separate debts
prior to their marriage, they alone would be responsible for repaying
them once they have become divorced.
Why Your Date of Separation Could Be Important
Only debt acquired during the marriage will be considered “community
debt,” which is why it is important to determine the date of your
separation. If your spouse starts to rack up credit card debt after you
separate, for example, you shouldn’t be held accountable for repaying
these debts. While this may seem fairly simple,
determining the date of separation is not always easy.
In some cases, the court will need to hold a separate trial just to determine
the official date of separation. During this trial, two factors will be
considered: the physical separation and one or both spouses’ intent
to end the marriage. If you and your spouse had agreed to separate on
a temporary basis, for example, the court will not consider this an official
date of separation.
Handling Debt in Complex Cases
For couples with high net worth, dividing debt can be complicated. The
debts involved with owning multiple businesses, for example, could prove
to be a contested issue within the divorce hearing. Just as dividing multiple
streams of income can be complex, so also is the task of assigning who
"owes" the debts associated with a business that provided for
In addition, some couples in contested divorces face a sudden increase
in spending from one spouse when a divorce is imminent but not finalized.
As with the previous section of this page, recording the date of your
separation will help prove how much debt is actually
Our certified specialist is prepared to represent couples who face complex
situations arising from possessing assets and debts of significant net
worth. Our attorney is prepared to uphold your rights and interests, ensuring
that you are not saddled with unjust amounts of debt.
Discuss Your Case with the Team at Goldberg & Gille: 626-340-0955
In any divorce,
property division is usually contentious . Both spouses want to ensure that they get what
is fair, and oppositely, that they aren’t responsible for repaying
more debt than they actually owe. If you are interested in protecting
your rights, it is crucial that you seek counsel from a Pasadena divorce
lawyer with the experience to effectively represent your best interests.
Goldberg & Gille has more than 80 years of combined experience, so
don’t wait to give us a call.